Community foundation

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Community foundations (CFs) are instruments of civil society designed to pool donations into a coordinated investment and grant making facility dedicated primarily to the social improvement of a given place. Community foundations are a global phenomenon with 1700 existing around the world of which over 700 are in the United States.

Operation

Community foundations are independent registered philanthropic institutions serving geographically defined territory, typically a city or administrative area (county, region and the like). The six main characteristics of the CFs are:

  1. Act as grant-making foundations – e.g. give grants to support development projects
  2. Their mission broadly defined (e.g. to improve quality of life in a community)
  3. Serve geographically defined communities – a city, state, region, district or province
  4. Are supported by a broad range of private as well as public donors and seek philanthropic contributions primarily from inside the community
  5. Are governed by multi-sectoral local boards reflecting the community
  6. Build capital endowment, which is an important element of sustainability

It is a combination of all these basic characteristics what makes true CF, although there are many other types of community organizations that have some of these characteristics.

Families, individuals, businesses, and nonprofit groups establish funds within community foundations into which they can contribute a variety of assets to be used for charitable purposes. The people or organizations that establish the funds can then recommend that grants be distributed, in the name of the fund or anonymously, to qualified nonprofit groups and schools. In the USA the donor receives a charitable deduction in the year that gifts are made into their funds, but not all countries where community foundations currently operate provide such incentives for donors. Increasingly, community foundations are hosting giving circles as a way to further support giving in their communities.

The assets of community foundations are pooled and invested, with donors typically having a choice of investment products.

The funds established at community foundations can be non-endowed or expendable funds (i.e., the corpus of the fund can be spent in its entirety) or they can be endowed, which limit distributions to the interest earned on the assets and/or the amount granted by the foundation as long as the corpus is not spent. Endowments last in perpetuity due to the corpus never being able to be spent.

History of community foundations

The first community foundation was set up in Cleveland in 1914 by Frederick Goff and operates now as The Cleveland Foundation. Others soon followed including the California Community Foundation and the Chicago Community Trust. The first Community Foundation in Canada was established in Winnipeg in 1921. Since the 1980s, a number of private foundations in the United States have created initiatives to develop community foundations in various states. One of the earliest such initiatives was in Michigan and in Indiana the Lilly Endowment funded a program that has spurred development of community foundations in eachh of the state's 92 counties. On a smaller scale, the Grand Victoria Foundation supports development of Illinois community foundations and the Kansas Health Foundation operates a similar program in Kansas communities.

Notable Community Foundations

Canada

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United States

According to the data available on July 26, 2014 on The Foundation Center website [1] the largest community foundations, with assets over $1,000,000,000 held, were:

  1. Silicon Valley Community Foundation – $4,723,897,000
  2. Tulsa Community Foundation – $3,729,789,000
  3. New York Community Trust – $2,443,372,250
  4. The Cleveland Foundation – $1,883,022,162
  5. Chicago Community Trust – $1,804,362,755
  6. Oregon Community Foundation – $1,698,892,336
  7. Greater Kansas City Community Foundation – $1,636,468,707
  8. The Columbus Foundation and Affiliated Organizations – $1,520,768,529
  9. Marin Community Foundation – $1,333,725,159
  10. California Community Foundation – $1,315,930
  11. The San Francisco Foundation – $1,183,262,000
  12. Foundation For The Carolinas - $1,016,512,373

In terms of annual giving, eight American community foundations gave more than $100 million in grants over the year according to the last data available on July 26, 2014.[2] The Silicon Valley Community Foundation gave out the most grants at $362 million, the Greater Kansas City Community Foundation was second in grants made at $226 million, The Chicago Community Trust was third with $169 million, The California Community Foundation was fourth with $164 million, and the Foundation for the Carolinas was fifth with $157 million.

Statistics made available by the Foundation Center enable also financial comparison of the largest community foundations with the largest corporate and private foundations and illustrate the fact that community foundations in the United States tend to be larger than corporate foundations in both assets and grants given.

United Kingdom

There are 48 Community Foundations in the UK[3] and UK Community Foundations (formerly the Community Foundation Network) acts as an umbrella organisation for all of them. Community Foundations in the UK include:

Supporters of community foundations

See also

References

  1. ↑ Foundation Center 25 Largest Community Foundations by Asset Size. Retrieved August 26, 2014.
  2. ↑ Foundation Center 25 Largest Community Foundations by Total Giving. Retrieved August 26, 2014.
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Publications

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  • Bernholz. L., K. Fulton, and G. Kasper. (2005). “On the brink of new promise: The future of U.S. community foundations.” Trade report. Funded by Charles S. Mott Foundation and the Ford Foundation.
  • Gast, E. (2006). Community foundation handbook: What you need to know. New York: Council on Foundations.
  • Hall, P.D. (1989). “The community foundation in America, 1914-1987.” In Richard Magat, ed., Philanthropic Giving. New York: Oxford University Press.
  • Hammack, D. (1989). “Community foundations: The delicate question of purpose,” in Magat, R., ed. An agile servant: Community leadership by community foundations. New York: The Foundation Center.
  • Magat, R., ed. (1989). An agile servant: Community leadership by community foundations. New York: The Foundation Center.
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